Why Is Macro So Hard? (What Passes for Expert Advice)

The article is the product of an interview with Casey Mulligan. He’s a mid-career economics professor at the University of Chicago. I’ve posted about his stuff on this blog before.

The money quote for today is:

Mr. Mulligan reserves particular scorn for the economists making this "eliminated from the drudgery of labor market" argument, which he views as a form of trahison des clercs. "I don't know what their intentions are," he says, choosing his words carefully, "but it looks like they're trying to leverage the lack of economic education in their audience by making these sorts of points." [emphasis added]

The bold quote gets right to the heart of the matter about why macroeconomics is hard: a lot of people make macroeconomic pronouncements that either 1) don’t display much clear thinking, or 2) are targeted at listeners that are unlikely to think clearly about the issues involved.

Those kind of conclusions are tarnishing the field of economics …They're sure not making it look good by doing stuff like that."

The bigger question is why Mulligan’s position wasn’t part of the debate in D.C. until this month, years after ObamaCare was passed?

… How did Mr. Mulligan end up conducting such "unconventional" research?

"Unconventional?" he asks with more than a little disbelief. "It's not unconventional at all. The critique I get is that it's not complicated enough."

Well, then how come the CBO's adoption of his insights is causing such a ruckus?

"I would phrase the question a little differently," Mr. Mulligan responds, "which is: Why didn't conventional economic analysis make its way to Washington? Why was I the only delivery boy? Why wasn't there a laundry list?" The charitable explanation, he says, is that there was "a general lack of awareness" and economists simply didn't realize everything that government was doing to undermine incentives for work. "You have to dig into it and see it," he explains. "The Affordable Care Act's not going to come and shake you out of your bed and say, 'Look what's in me.' " [two levels of emphasis added]

Keep in mind that this is an opinion piece, coming from The Wall Street Journal, so this view shouldn’t surprise you:

Judging by their reaction to the CBO report, the less charitable explanation is that liberals would have preferred that the public never found out.

* I made a similar post at SUU Macroblog, which is required reading for some of my students.

Genesis

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